One of the more interesting observations from this year’s Specialty Food Association Summer Fancy Food Show wasn’t a particular product, per se, although there were plenty of incredible new things on offer. For me, one of the real revelations was the growing number of brands that, pre-pandemic, would have been considered niche players. But now they’re starting to shape conversations across the industry.
The Food Institute’s midyear report, produced in partnership with the Specialty Food Association and MenuData, devotes an entire section to what it calls “the rise of challenger brands.” It points to companies such as Liquid Death, BUILT, BUBBL’R and Actual Veggies as examples of businesses gaining traction by combining cleaner ingredients, functional benefits, and uncommonly clear consumer messaging.
Clearly the report is right on the money: challenger brands are gaining influence. But I think it might understate why.
These companies are succeeding because they bullseye consumer needs before much of the rest of the industry does.
Traditionally, established food companies have competed from positions of enormous strength; huge national advertising budgets, dominant shelf positions, extensive distribution networks, and generations of consumer familiarity.
Those advantages still matter and they probably always will; they won’t suddenly become liabilities. But… they no longer guarantee growth.
That’s because, as we’ve seen time and again, today’s consumer evaluates products differently.
Consumer Needs Come First
Persistent inflation has made shoppers far more deliberate about every purchase. Consumers continue looking for quality, but they increasingly expect products to communicate a clear benefit, a fair price, and an obvious reason for choosing them over dozens of alternatives. The report puts it succinctly: value drives shelf decisions, proof builds trust, and function fuels innovation.
Many of the fastest-growing challenger brands seem to begin by grasping – comprehending – a clearly defined problem out there in consumer-land.
A shopper wants more protein… Another wants fewer artificial ingredients… Someone else is looking for gut-health benefits, convenient nutrition, or maybe just an exciting, globally inspired flavor.
The successful brands address one of those needs directly. Their packaging explains the upside quickly and their ingredients reinforce the message. Their pricing remains within reach of consumers willing to pay – even a premium – for a product that delivers a meaningful improvement over existing options.
Hailey Swartz, co-CEO of Actual Veggies, captures the formula well in the report: “Real need, great taste, and accessible price: all three have to be true simultaneously.“
Three things. But notice what it doesn’t include…
It doesn’t mention heritage, advertising budgets, or household recognition. Those attributes still have value, but they increasingly follow product success rather than create it.
Shelf Space Is a Kind of Performance Review
The report also includes another observation retailers should keep in mind. Brandon Warren of The Barcode Group notes that shelf placement is just the first step, only the beginning. Products need packaging that communicates value immediately, pricing that encourages repeat purchases and enough consumer demand to justify continued distribution. Swartz summarizes the challenge with another memorable line: “Getting on shelf is just the audition. Staying there is the real test.”
That comment resonates because it reflects what happens inside supermarkets every day.
Check out enough stores over the course of a year and the pattern becomes obvious. New products appear – some gain additional facings. Others disappear during the next category reset and clearance tags are usually tombstones. Shelf space is rarely permanent; it is continually earned.
Today’s Challenger, Tomorrow’s Category-Maker
Viewed through that lens, challenger brands become a kind of early indicator.
They identify shifts in consumer expectations before those shifts become large enough to reshape an entire category.
Greek yogurt followed that path. Kombucha did as well. Oat milk, protein beverages, probiotic sodas and globally inspired condiments all spent time as emerging products before becoming significant merchandising priorities.
It seems to me that it’ll pay to pay attention to the individual brands exhibiting strong momentum, and to feel out the consumer problem those brands are solving.
The brands themselves may come and go – and a lot of them will go. But the consumer needs they uncover tend to endure much longer. For retailers, that’s the real value of watching challenger brands. They’re often the first visible sign that an entire category is about to change
I think that’s probably the most valuable lesson from this year’s Summer Fancy Food Show.